NYC Mansion Tax: Essential Guide for Buyers in 2025
By Thomas Kutzman on March 17, 2025
The NYC mansion tax, also known as the York City mansion tax, is a residential real estate transfer tax imposed on real property purchases with a price over a specified dollar amount and for most New Yorkers the mansion tax is one of the largest potential when buying a condo, co-op, townhouse, single-family home, or any other residential property.
If you are planning to buy an apartment or home in New York City, below we’ve outlined what you need to know.
What is the mansion tax in NYC?
The mansion tax NYC is a real estate transfer tax imposed by New York State on residential property purchases with a total consideration over $1 million. This tax is a percentage of the purchase price and is paid by the buyer at the time of closing.
Often referred to as the "mansion tax" or "luxury tax," it applies to all residential properties sold in New York City, including individual condominium units, houses, and cooperative apartment units. Additionally, buyers must ensure they have all necessary documentation, including the credit line mortgage certificate, which is required for compliance with state regulations.
The mansion tax is an important factor for anyone looking to buy high-value real estate in NYC, as it can significantly impact the overall cost of the property.
Key questions to ask about mansion tax in NYC
- What properties are subject to the mansion tax law?
- Who pays the NYC mansion tax?
- How much this additional tax will contribute to your closing costs if applicable?
- How you can offset these taxes and closing costs with the cost-saving strategy of a buyer commission rebate?
- When do you pay and file the required forms for mansion tax?
- What is the history and future of the mansion tax law?
- Does the mansion tax apply to properties used as a personal residence?
When is a residential real estate purchase subject to the mansion tax in NYC?
While you may not exactly feel like you are buying a "mansion" when you are buying a condo, co-op or home in NYC, the sale price threshold for the real estate transfer tax (commonly referred to as the NYC mansion tax) kicks in when consideration for a purchase is $1,000,000 or greater for a home or apartment.
This only applies to properties purchased for that amount or more, so if you did buy something for $999,999.99, you owe nothing additional. A penny more and the mansion tax applies, which includes properties such as an individual condominium unit, a three-family house, and cooperative apartment units. It is paid for by you the buyer at the time of closing.
PREVU SMART TIP
Did you know you can get a buyer rebate from your real estate broker? Buying a NYC apartment with Prevu you’ll receive a rebate up to half of the commission paid to the buyer’s broker at closing.
Browse listings for sale in NYCWho pays the NYC mansion tax?
Typically, the NYC mansion tax is paid by the buyer of the property. However, it’s worth noting that the payment of this tax can sometimes be negotiated between the buyer and the seller. In certain cases, the seller may agree to cover the mansion tax, although this is less common.
By default, the responsibility for transfer taxes falls on the seller, but the mansion tax specifically defaults to the buyer. Therefore, it’s crucial for buyers to factor in the mansion tax when determining their maximum purchase price to ensure they are fully prepared for all associated costs.
How much is mansion tax in New York?
If your purchase price is equal to or greater than $1,000,000 (1 million dollars), you will be required to pay an additional tax on your purchase. The percentage of that tax will now vary based on your purchase price.
It is important to note that the mansion tax is not deductible on federal tax returns, but it does increase the tax basis of the property.
On March 31, 2019, the New York state Senate and Assembly agreed upon a new schedule of mansion tax rates as part of New York’s 2020 budget. The new rates start at 1% beginning with properties of $1 million or greater and gradually increase to a maximum of 3.9% for properties purchased for $25 million or greater. These increased rates by price point became effective and imposed on purchases where contracts are signed after April 1, 2019 and the transaction closes after July 1, 2019.
The NYC mansion tax condo buyers pay is the same as the NYC mansion tax co-op buyers pay, assuming the same purchase prices for the two apartments.
How is the mansion tax calculated?
The mansion tax is calculated based on a tiered rate system, which varies depending on the property’s sale price. The tax rates range from 1% to 3.9% of the purchase price, with higher rates applying to more expensive properties. This tax is applied to the entire sale amount, including any additional considerations. Understanding how the mansion tax is calculated is essential for buyers to accurately estimate their total closing costs.
Mansion Tax NYC Rates - 2025 by Price Point
- 1.00% for purchases $1,000,000 to $1,999,999
- 1.25% for purchases $2,000,000 to $2,999,999
- 1.50% for purchases $3,000,000 to $4,999,999
- 2.25% for purchases $5,000,000 to $9,999,999
- 3.25% for purchases $10,000,000 to $14,999,999
- 3.50% for purchases $15,000,000 to $19,999,999
- 3.75% for purchases $20,000,000 to $24,999,999
- 3.90% for purchases $25,000,000 or greater
When you are estimating how much you will need to purchase an apartment or home in NYC or when your real estate attorney is calculating your closings costs in preparation of your transaction, it is important to include the mansion tax NYC buyers pay (if required) in your calculations for the appropriate rate based on your sale price.
For example, if you are purchasing a condo or co-op for $2,500,000, you will have to pay a NYC mansion tax at a rate of 1.25% or $31,250 in addition to all of the other closing costs associated with your purchase (assuming you signed your contract after April 1, 2019 and close after July 1, 2019).
Mansion Tax Example in NYC ($2,500,000 apartment)
- Purchase Price: $2,500,000
- Down Payment: $750,000
- NYC Mansion Tax (1.25%): $31,250
Impact of mansion tax on buyers and sellers in NYC
The mansion tax has significant implications for both buyers and sellers in NYC’s high-value real estate market.
For buyers, this tax represents a substantial additional cost that must be factored into the overall budget for purchasing a high-value property. It can influence the affordability and desirability of certain properties.
For sellers, the mansion tax can affect pricing strategies and market liquidity. Sellers may need to price properties just below mansion tax thresholds to attract more buyers, potentially limiting their pricing flexibility.
Additionally, the tax can deter some buyers from purchasing high-value properties, impacting the overall real estate market dynamics in NYC.
How to avoid NYC mansion tax
Curious how to avoid mansion tax in NYC? While it may feel unfair to be hit with burdensome taxes and fees when only buying a one or two bedroom apartment, you can’t avoid paying this tax. However, the simplest way you can offset or reduce your mansion tax bill and closing costs in NYC and give yourself an advantage with the cost-saving strategy of a buyer commission rebate.
Receiving a commission rebate (also known as a commission refund) allows you to get cash back from your real estate broker. At Prevu, we are a technology-driven, full-service brokerage that passes a significant rebate along to our customers.
With Prevu’s Smart Buyer™ Rebate, you receive up to half of the commission Prevu receives for representing you as a buyer's broker. For example, if you buy a $2,000,000 condo or co-op with a 6% commission (3% paid to seller’s broker and 3% to the buyer’s broker), your commission rebate totals 1.5% of the purchase price. That’s a savings of $30,000 that you can use to offset all of your $25,000 mansion tax and then some.
To estimate your potential closing costs and see if you'll have to pay mansion tax, check out Prevu's NYC closing costs calculator for buyers.
Exemptions and special cases
While there are no general exemptions from the mansion tax, certain transfers might be free from this tax. For example, property transfers between spouses during a divorce are generally exempt. Additionally, some properties may qualify for a reduced tax rate or exemption, such as those used for charitable or religious purposes.
It’s essential to consult with a tax professional or attorney to determine if any exemptions or special cases apply to a specific property transaction. Understanding these nuances can help buyers and sellers navigate the complexities of the mansion tax in NYC.
When do you pay and file the required forms for mansion tax?
As discussed earlier, the mansion tax is a real estate transfer tax, and as a result the applicable taxes will be submitted along with a Form TP-584 in the State of New York. For sake of simplicity, if your real property, cooperative apartment unit, or co-op apartment is subject to the tax, you should anticipate paying at closing. The necessary filings are then typically submitted by the title company post closing if you are purchasing a condo, house, or townhouse in NYC. If you are purchasing a co-op, your real estate attorney will coordinate the submission.
Does mansion tax apply to new construction condos in NYC?
A common question from buyers that are interested in new developments is - will I still have to pay the mansion tax? The answer is unfortunately yes. If the purchase of an apartment in a new development is equal to or greater than the $1 million minimum consideration threshold, then mansion tax will be due according to the statutory rate for the purchase price.
Mansion tax is applicable for re-sale condos, co-ops, townhouses, as well as new development condos.
What is the history of the mansion tax?
In 1989, the mansion tax was originally proposed by the administration of then New York State Governor Mario Cuomo (the father of current Governor Andrew Cuomo). The intention of this and other taxes levied in the law that finally passed was to improve New York State's budget during a difficult economic period. At the time, taxing properties costing more than $1,000,000 placed the economic burden on a small group of high-earning, wealthy New Yorkers who were perceived as being able to afford it.
What is the future of mansion tax law?
Times have changed though! For many average New Yorkers, it’s hard to associate the term "mansion" with this tax when they are likely buying little more than a one-bedroom when just crossing over the $1,000,000 price threshold for the initial 1% tax.
The mansion tax has had a significant impact on the New York City real estate market, influencing both buyers and sellers.
In recent years, there has been growing debate around what will constitute a mansion tax in the future. In 2015, Mayor Bill Di Blasio proposed the idea of reforming the mansion tax laws with the potential to raise the minimum price threshold subject to the tax and/or increase the mansion tax rate for a second, higher price threshold to be determined.
The recent action by New York State at the end of March 2019, creating a graduated system of mansion tax rates, is the first major change in decades. It is likely to remain an ongoing topic of discussion among politicians as they consider the implications on housing affordability and future state budgets.
Does the NYC mansion tax apply to properties used as a personal residence?
One of the key aspects of the mansion tax is that it applies uniformly to all residential real estate transactions that meet the price thresholds, regardless of the intended use of the property.
This means that if you are purchasing a property in NYC as a personal residence or an investment property, it may be subject to the mansion tax at time of purchase.
As always, the Prevu Team is here to help if you have any questions about the home buying process in NYC. You can reach us at team@prevu.com or (646) 603-6868.
To browse thousands of listings in NYC, create your own custom property feed today to begin receiving property and open house alerts.
DISCLAIMER: This material was provided for informational purposes only, and is neither intended to provide, nor should be relied upon as tax, legal, or accounting advice. Prevu and its subsidiaries do not provide tax, legal, or accounting advice. You are encouraged to consult your personal tax, legal, or accounting professionals before considering any transaction as your individual situation may vary.
